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Ethics and the Future of Business Session 1 Summary (Grade 9.5)
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Session 1:Morality is humans’ ability to distinguish between right and wrong.
Ethics is the systematic study of morality.
Ethical theories are principles and rules that determine right and wrong in
different situations.
Normative ethics, i.e. the study of how we ought to behave.
Ethics typically examines right and wrong from the perspective of a human being
(anthropocentric), instead of, for instance, nature.
Key questions include:
1. What kind of moral principles should guide our actions?
2. What kind of outcomes should we aim for?
Ethics is not just theorization of morals, but the aim is also to affect practice.
Ethical theories can give contradictory solutions to the same problem.
Business ethics is the study of business situations, activities, and decisions
where issues
of right and wrong are addressed.
In society, morality is the foundation of the law.
• Law and ethics are partly overlapping.
Nonetheless:
1. The law does not cover all ethical issues (e.g. cheating on your partner).
2. Not all legal issues are ethical (e.g. driving on the right side of the road).
3. Law and ethics can involve contradictions (e.g. Apartheid).
• The road from unethical to illegal is short and slippery.
• Companies can operate in locations with lacking legal infrastructure
Crane, A., Matten, D., Glozer, S. & Spence, L. 2019. Business ethics: managing
corporate citizenship and sustainability in the age of globalization (5th ed.).
Oxford University Press. Chapter 3
Ethical absolutism: there are eternal, universally applicable moral principles.
According to this view, right and wrong are objective qualities that can be
rationally determined,
irrespective of the circumstances.
Ethical relativism: morality is context-dependent and subjective. Stemming in
part from anthropological studies of culture, relativists tend to believe that there
are no universal right and wrongs that can be rationally determined-it simply
depends on the traditions, convictions, or practices of those making the decision.
In business ethics studies, the notion of relativism occurs frequently in
international business issues, where it is argued that a moral judgement about
behaviour in another culture cannot be made from outside because morality is
culturally determined. Ethical relativism is different from descriptive relativism:
while the latter merely suggests that different groups have different ethics, the
former proposes that both sets of beliefs can be equally right.
, Ethical pluralism: An alternative approach to absolutism and relativism. A
pluralist approach accepts that we ought to recognize that incompatible values
can be equally legitimate and tolerate them as such.
Western Modernist Ethical theories are absolutist as they give one unequivocal
solution to a given case. They are also normative, because they start with an
assumption about the nature about the world or human beings. There are two
types:
Consequentialist theories: goal-oriented, look at the outcome of an
action, if it is desirable, the action is morally right; if not, it is morally
wrong.
o Ethical egoism = an action is morally right if in a given situation
all decision-makers freely decide to pursue either their (short-term)
desires or their (long-term) interests.
Usually not considered as an ethical theory, although this
view is very influential in economics.
Controversy lies in the focus in egoism on self-interest, such
that the only obligation for a person, or by extension a
business, is self-promotion.
“Leviathan” (Thomas Hobbes): in a state of nature (system
without any rules, government, etc) anarchy and chaos would
result war of all against all. He argued that it was best for
everyone-every individual's self-interest-to be governed by
some impartial rules.
Hobbes contribution to ethical egoism: no person has a
moral obligation to others beyond things which serve
their own interest
Ayn Rand: promoted that everyone is responsible for their
own happiness, self-development and self-perfection.
Adam Smith and Milton Friedman: capitalism and free
market.
The influence of egoism is related to the perception of
ideal markets and (a limited reading of) Adam Smith’s
”invisible hand”
Difference egoism based on desire vs. selfishness: egoist can
be moved by pity for others, the selfish person is insensitive
to the other.
Egoism based on interest (e.g. student studying all day
is good and student drinking all night is bad, it comes
from the idea of objective value - one way of acting is
objectively better or 'more ethical' than another vs.
egoism based on desires (e.g. student drinking all
night, not in his best interest, but in his desire)
Problems:
Inconsistent as it ”condones blatant immoral wrongs,
since 'anything goes'‐violence against the vulnerable,
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